Government of
Meghalaya Budget Speech

2002 - 2003

By

Shri A. H. Scott
Lyngdoh

Finance Minister,
Meghalaya

26th
March, 2002

I rise to present the Budget Estimates for the year
2002-2003. This is the fourth Budget of this august House. It also
reflects plan budget estimates for the first year of the Tenth Five Year
Plan.

I.

INTRODUCTION

The State had submitted its Draft Tenth Plan
proposals amount to Rs. 3,00,000 lakhs. This proposal is yet to be
discussed and finalised by the Planning Commission.

The Draft Annual Plan proposals for 2002-03 amounting
to Rs. 56,200 lakhs including Rs. 3,500 lakhs for the Pradhan Mantri
Gram Sadak Yojana had similarly been submitted to the Planning
Commission. Since the budget estimates had to be framed and
printed adequately in advance for being placed before this august House,
these estimates reflect annual plan provisions amount to Rs. 56,200
lakhs including Rs. 3,500 lakhs for the Pradhan Mantri Gram Sadak Yojana,
subject to adjustment, mutatis-mutandis, as and when the Planning
Commission finalises the size and sectoral outlays of our Annual
Plan for 2002-2003.

In the meantime, Planning Commission held discussions
with the State Government on Wednesday the 13th March, 2002
and finalized the size of the Annual Plan for the 2002-2003 at Rs.
54,500 lakhs besides Rs. 3,500 lakhs for the Pradhan Mantri Gram Sadak
Yojana which amount will be directly released to the DRDA's from next
year onwards. This amount of Rs. 54,500 lakhs includes Rs. 1,800 lakhs
as a one-time Additional Central Assistance for funding special
projects, namely -

reconstruction of the State Assembly premises, and

construction of new premises for -

the Shillong Bench of the Gauhati High Court,

a State Convention Centre,

the Shillong Jail and

the Home Guards Head Quarter Complex.

Thus the approved size of the annual plan 2002-03, in
absolute terms is over 19 percent above the approved level of the
current years' annual plan. Sectoral Outlays, are, however, yet to be
finalised by the Planning Commission.

In this connection, it needs to be reiterated that
the Eleventh Finance Commissionlinked release of 15 per
cent of the amount awarded to States to cover their revenue gap, to
their adoption and implementation of fiscal reforms. Such as
widening the tax base, increasing tax rates on a year to year basis,
pricing services such as irrigation, water charges, bus charges,
reducing subsidies, abolition of vacant posts in Government except those
of Primary Teachers and Health Workers, resorting to contract
appointments, redeployment of work-charged establishment for new capital
works, moratorium on all new work-charge and casual appointments, phased
reduction of non-plan expenditure, etc.

Our revenue gap grant for the year 2002-03 amounts to
Rs. 32,620 lakhs. Thus 15 per cent of this amount of Rs. 4,893
lakhs is reserved and transferred to an Incentive Fund,
for subsequent release depending on our progress in implementing
fiscal reforms.

In this connection, I wish to inform this august
House that the Central Government ha snow specified that release of the
share of any State from the Incentive Fund is based on a single monitor
able fiscal objective, namely, each State is expected
to achieve minimum improvement of 5 per cent in their revenue
deficit or 3 per cent in their revenue surplus as a per cent age of
their revenue receipts each year, till 2004-05, with
1999-2000 as the base year.

The actual budgetary surplus of our State for the
year 1999-2000 as a percentage of revenue receipts, as verified by the
Accountant General, Meghalaya was 1.6 per cent. The corresponding
percentage for 200-01 was 4.6 per cent, reflecting a 3 per cent
improvement in the actual revenue surplus as a percentage of revenue
receipts. Meghalaya, has therefore qualified for releases of its share
of Rs. 5,072 lakhs from the Incentive Fund for 2000-01, besides a bonus
of Rs. 112 lakhs, totaling Rs. 5,184 lakhs. This fund will be released
to the State as soon as it executes an MOU with the Central Government
for further fiscal reforms such as downsizing of Government, power
section reforms, PSU reforms, at all, in the State. The draft MOU is
presently being finalised and will soon be submitted to the Central
Government for consideration and execution.

The State is required to achieve a revenue surplus of
7.6 per cent as a percentage of its revenue receipts during the current
year, to qualify for release of its share form the Incentive Fund for
2001-02 amounting to Rs. 4,956 lakhs and a bonus of Rs. 194 lakhs,
totaling Rs. 5,150 lakhs. Our ongoing economy measures are expected to
result in the required 7.6 per cent surplus during the current year.

Similarly, the State is required to achieve a 10.6
per cent revenue surplus as a percentage of its revenue receipts during
2002-03. All possible efforts will be made to achieve this target and
qualify for release of its next year's share from the Incentive fund
amounting to Rs. 4,893 lakhs and a bonus of Rs. 210 lakhs totaling Rs.
5,103 lakhs.

Before, I present the Budget Estimates for
2002-03, I propose Mr. Speaker, Sir, briefly reflect on the National
Economy and the State Economy, highlight some of the proposed programmes
for the year and indicate the status of our present performance.

II

NATIONAL ECONOMY

2.1

The year 2001-2002- experienced certain unforeseen
difficulties which slowed down the rate of economic growth. The average
world economic growth during the year is estimated to stand around 2.4
per cent. The Union Budget presented to Parliament by the Union
Finance Minister on 28th February, 2002 indicates and expected growth
rate of 5.4 per cent for the national economy, during the year 2001-02 ,
as against the targeted growth rate of 6 per cent.

The recession in economic growth, after seven
consecutive years of higher growth rate, is to a great extent, the
result of a spurt in national and international terrorist activity
and global economic slow down.

Not with standing these, our national economy
performed relatively well. Normal monsoons during the year, after two
years of irregular monsoon activity, resulted in considerable
agricultural recovery. The higher national growth rate in the
agricultural sector has however been set back by industrial slow down,
but the country's food also are overflowing and its buffer food stock
have risen to an all time high of over 60 million tonnes.

At the same time, while the country's inflation has
fallen to an all time low of 1.1. per cent, our national foreign
exchange reserves having exceeded 50 billion US Dollars.

It also needs to be retreated that the recent
decrease of petroleum prices has provided considerable fillip to the
economy as a whole.

The Union budget for the year 2002-03 is based on the
strategy of -

continuing emphasis on agriculture and food economy
reforms,

enhancing public and private investment in
infrastructure,

strengthening the financial sector and capital market,

accelerating structural reforms and generating
industrial growth.

providing social security to the poor, and

continuing tax reforms and fiscal adjustments at the
Central and State levels.

The Union Budget also underscores priority to State
fiscal reforms. Twelve States have so far drawn up medium term fiscal
reform programmes in consultation with the Central Government and have
been received assistance from Incentive Fund.

The Union Budget also underlines the commitment of
the Central Government to provide reform linked assistance to the States
in a number of sectors like Accelerated Power Development & Reform
Programme (APDRP), Accelerated Irrigation Benefit Programme (AIBP),
Urban Reform Incentive Fund (URIF), and Rural Infrastructure Development
Fund (RIDF) for which a total amount of Rs. 12,30,000 lakhs is
provided in the Union budget.

The Union budget also provide a lumpsum amount of Rs.
2,50,000 lakhs for policy reforms in sectors which are constraining
growth and development.

However, the Union Budget reflects the current year's
net tax revenue collection by the Centre at Rs. 1,42,34,800 lakhs as
against the estimated collected of Rs. 1,63,03,100 lakhs indicating a
shortfall of 12.7 per cent, largely due to lower collection of custom
and union excise duty as a consequence of national industrial slow down.

II.

STATE ECONOMY

3.1

The Gross State Domestic Product in terms of per
capital income at current prices registered an increase from Rs. 7,743
during 1993-94 to Rs. 14,726 during 2000-2001. However the relative
growth during the same period at constant prices i.e. 1993-94 prices is
from Rs. 7,743 during 1993-94 to Rs. 9,522 during 2000-2001, as per
quick estimates.

3.2

The advance estimate of NSDP for the current year
2001-2002 is Rs. 14,510 per capita at current prices and Rs. 8,827 at
constant prices, i.e. 1993-94 prices as compared to an all India advance
estimate of Rs. 17,789 per capita at current prices and Rs. 10,618 at
constant prices i.e. 1993-94. prices.

Thus the
estimated annual growth rate of the State during the current year is
4.34 per cent at constant prices and 10.65 per cent at current prices
which is higher than the average all India growth rate of 3.5 per cent
at constant prices and 4.9 per cent at current prices, during the same
period.

3.3.

The estimated Gross State Domestic Product, at factor
cost, at current prices for the year 2001-2002 is Rs. 4,09,467 lakhs as
per advance estimates which reflects a 12.9 per cent growth in GSDP over
the GSDP for the year 2000-2001.

3.4

The tertiary sector of our economy continues to grow
faster than other sectors. The share of the primary sector in GSDP, at
current prices, has reduced from 31.46 per cent during 1993-94 to 29.82
per cent during 2001-2002. The share of the secondary sector similarly
fell from 14.29 per cent to 13.37 per cent during the same period. This
resulted in the continuing ascendancy of the tertiary sector whose share
rose from 54.25 during 1993-94 to 56.25 per cent during 2001-2002.

IV

STATE FINANCES

4.1

The Annual Accounts of the State for the year
2000-2001 reflects the following position.

(a)

The year opened with an opening balance of Rs.
157 lakhs.

(b)

Against a total revenue receipt of Rs. 1,13,215 lakhs,
the total revenue expenditure was Rs. 1,07,947 lakhs resulting in a
revenue surplus of Rs. 5,268 lakhs.

(c)

Against the total revenue receipts, recoveries and
other receipts amount to Rs. 1,14,486 lakhs, the total revenue and
capital expenditure excluding public debt was Rs. 1,39,441 lakhs
resulting in fiscal deficit of Rs. 24,955 lakhs.

(d)

Against the fiscal deficit of Rs. 24,955 lakhs, there
was an interest payment of Rs. 11,366 lakhs, resulting in primary
deficit of Rs. 13,589 lakhs.

(e)

Against a total budgetary receipt of Rs. 17,36,650
lakhs, there was a total budgetary expenditure of Rs. 17,32,231 lakhs
resulting in budgetary surplus of Rs. 4,419 lakhs which along with the
opening balance of Rs. 157 lakhs resulted in a closing balance of Rs.
4,576 lakhs during the year 2000-01.

4.2

The emerging position reflects a marked improvement
over the fiscal position reflected in the budget estimates for the same
year, as presented to the State Legislature. This has been largely due
to our continuing efforts to generate additional fiscal resources and to
implement continuing economy measures.

4.3

Effort to generate additional resources and enforce
economy in expenditure have resulted in the budget estimates for
2001-2002 being revised as follows.

(a)

The revised estimates for the year 2001-02 reflect an
opening balance of Rs. 4,567 lakhs.

(b)

Against a revised revenue receipt of Rs. 1,35,787
lakhs the revised revenue expenditure is Rs. 1,35,585 lakhs resulting
in a revenue surplus of Rs. 202 lakhs.

(c)

Against a revised total budgetary receipt of Rs.
15,94,759 lakhs, the revised budgetary expenditure is Rs. 15,95,778
lakhs resulting in a closing balance of Rs. 3357 lakhs after
adjusting the opening balance of Rs. 4,576. lakhs.

4.4

It is proposed to continue with the economy measures
currently in force besides resorting to additional resource mobilization
in terms of fresh taxation proposals which I will make later today.
These are expected to result in further improvement of the State's
fiscal health.

4.5

The Budget estimates being presented today for the
year 2002-2003, propose as follows :-

(a)

An opening balance of Rs. 3,557 lakhs.

(b)

A total revenue receipt of Rs. 1,50,035 lakhs against
a total revenue expenditure of Rs. 1,44,272 lakhs, resulting in a
revenue surplus of Rs.5,763 lakhs which will further improve
with the anticipated release of Rs. 5,184 lakhs form the Incentive Fund
for 2000-01 and Rs. 5,150 lakhs from the Incentive Fund for 2001-02 , as
already indicated earlier in my address. Further additional
resources generated and attendant economy measures will result in
further savings and the year is expected to close with adequate revenue
surpluses, to qualify for further releases form the Incentive Fund,
during the following year.

(c)

The total budgetary receipt during the year are
estimated at Rs. 16,35,346 lakhs against a total budgetary expenditure
of Rs. 16,30,958 lakhs, resulting in an estimated closing balance of Rs.
4,388 lakhs which is likely to further improve as a consequence of the
measures already indicated.

4.6.

The Letter of Credit and Letter of Allotment system
which had been introduced in all Departments of the State, except in
relation to payments of Salaries and allowances, has improved the
buoyancy of State Finances by appropriate regulation and control
of expenditure from the public exchequer. These measures will continue.

V.

VOTE OF ACCOUNT

5.1

Along with the budget estimates for the current year,
I shall also be presenting a Vote-on-Account for covering expenditure
during the first three months of the year 2002-2003, for consideration
of this august House. The full budget will be taken up for consideration
during the re-assembled Budget Session which is likely to be held during
June 2002.

VI.

NON-PLAN BUDGET 2002-2003

6.1

The Non-Plan budget Estimates for 2002-2003 envisage
an outlay of Rs. 1,13,811 lakhs which is 3.7 per cent higher than the
likely non-plan expenditure of Rs. 1,09,746 lakhs during the current
year. All possible efforts have been made to adequately provide for
normal maintenance and recurring expenses, amortization of debts and
liabilities and critical maintenance cost of normalized projects. Fiscal
measures to contain avoidable non-plan expenditure will continue, but
critical and unavoidable segments of expenditure have been protected and
sufficiently provided for.

VII.

PLAN BUDGET 2002-2003.

7.1

The approved Ninth-Plan outlay is Rs. 2,50,062 lakhs.
The Plan expenditure during 1997-98, 1998-99, 1999-2000 and
2000-2001 were Rs. 24,883 lakhs, Rs. 29,909 lakhs, Rs. 34,328 lakhs and
Rs. 46,284 respectively. Although the approved core Plan size for the
current year is Rs. 48,700 lakhs, the revised Plan estimates based
on available resources is Rs. 49,150 lakhs. Thus the cumulative
plan expenditure during the Ninth Plan period is likely to stand at Rs.
1,84,555 lakhs which is 73.8 per cent of the approved size of the Ninth
Plan. The shortfall of 26.2 per cent is entirely due to
non-materialization of allocated loans from financial institutions.

7.2

The approved Annual Plan size of Rs. 54,500 lakhs for
the year 2002-2003 besides Rs. 3,500 lakhs for PMGSY totaling Rs.
58,000 lakhs is over 19 per cent higher than the approved plan size for
the current year.

VIII.

DEPARTMENTAL PROGRAMMES LAW & ORDER

The State remained free from communal disturbance
during the year. Some local militant outfits however continue to
indulge in sporadic anti-social and criminal activities which terrorise
the peaceful citizens of the State and generate an atmosphere of
insecurity and fear. State Police continue their concerted efforts to
effectively contain such activities. A number of armed skirmishes have
taken place with resultant loss of lives on both sides. We salute the
memory of the beloved members of the State Police Force who have laid
down their lives in the discharge of their duties to the State and its
people. We also place on record our sincerest sympathies and concern for
the families of our fallen men. We will continue our efforts to
rehabilitate them

Appeals continue to be made to all misguided groups
to come over-ground for negotiations and joining the mainstream of
public life Government accords the highest priority to the
rehabilitation of surrendered militants and every effort will be made
for their early rehabilitation. We look forward to proactive
interventions form Church Leaders and responsible citizens in this
regard.

8.1

AGRICULTURE INCLUDING HORTICULTURE

Agriculture continuous to play a predominant role in
the State's economy. The current year is expected to end with a total
food grain production of 2.23 lakhs tonnes. Rice which is the major
crop, accounts for 1.51 lakh tonnes or 67 per cent of the total food
grain production. The target foodgrain production for the next year has
been fixed at 2.44 lakhs tonnes. Efforts will be made to bring more area
under High Yielding Varieties of Seeds and to popularise cultivation of
wheat, maize and pulses. Attempts will also be made for increasing the
crop intensity and for scientific land development and management.

Of the commercial crops, potato accounts for almost
50 per cent of the total production. The production of potato is likely
to increase form 2.20 lakhs tonnes during 2001-02 to 2.51 lakh tonnes
during the next year, registering an increasing of 14 per cent during
the period. The existing scheme of Potato Development will be
expanded to Tuber Crops Development to include other tuber crops like
tapioca, sweet potato and yam, to enhance food security.

Horticultural production consisting mainly of
Pineapple, Bananas and Oranges is likely to be 2.16 lakh tonnes during
2001-2002 and is targeted to increase to 2.42 lakh tonnes during the
next year indicating an increase of 12 per cent over the period. The
launching of the Technology Mission for development of Horticulture in
the State is expected to result in accelerated improvement in
horticultural production.

The two principal Regulated Markets established by
the State Agricultural Marketing Board at Mawiong and Garobadha are
expected to support the small farmers, in terms of cold storage,
marketing facilities and auction platforms. Efforts will continue to
pre-empt the practice of day-end distress sales of agricultural produce
as well as to train the farmers in grading, post harvest storage,
standardization etc.

The Plan investment in the Agriculture Sector
increased from Rs. 1,060.25 lakhs during 1996-97 to a revised level of
Rs. 1,323 lakhs during the current year. An amount of Rs. 1,500 lakhs is
proposed for this sector during 2002-03 reflecting an increase of 13.4
per cent.

8.2

SOIL AND WATER CONSERVATION.

Our efforts during the last three decades for
improved Soil & Water management have resulted in the increase of
developed agricultural lands with assured irrigation form 1,500 hectares
during 1972-73 to nearly 44,000 hectares during the current year and a
corresponding increase in afforested degraded lands from approximately
1050 hectares to 30,300 hectares, over the same period. Similarly, the
area under erosion-control and cash crop plantations rose form 102
hectares and 363 hectares to nearly 9,400 hectares and 10,300 hectares,
respectively.

Our focus will continue to be on Jhum Control as well
as Watershed Management Schemes. The activities of the Cash Crops
Development Board will be expanded. A new scheme for reclamation of
degraded land affected by mining operations will be undertaken during
the year 2002-03.

The plan investment on this sector increased by 52.8
per cent form Rs. 556 lakhs during 1996-97 to the revised level of 850
lakhs during the year. An outlay of Rs. 900 lakhs is proposed for this
sector during 2002-03.

8.3

ANIMAL HUSBANDRY AND DAIRY DEVELOPMENT.

Plan investment increased form Rs. 546.14 lakhs
during 1996-97 to Rs. 900 lakhs during the current year. This reflects
the importance attached to the sector. Estimates indicate that over 25
per cent of the annual egg and meat requirement is imported from other
States. Effort will continue to augment production of meat and
eggs to achieve self-sufficiency in this field. Egg and meat-production
for 2002-03 is targeted at 90.2 million and 35,000 tonnes respectively.

Milk production has similarly registered an increase
from 60,000 tonnes to 66,430 tonnes over the last four years. During the
year, the focus will be on strengthening of infrastructure in all
districts to improve breeding facilities and encourage adoption of
modern technology in animal and animal produce production.
Infrastructure for animal health coverage will be strengthened.
Diagnostic Laboratories will be set up in the State, in a phased manner.

The Plan outlay for this sector for the year 2002-03
has been tentatively fixed at Rs. 1,025 lakhs

8.5

FISHERIES

Fish production in the State continues to account for
not more than 20 per cent of our annual requirement. Efforts will
continue to encourage fish culture in the private sector and to make
better utilisation of available natural water bodies for increased fish
production.

Inland fish production is likely to reach 5500 tonnes
during current year and is targeted for the level of 6,500 tonnes during
the next year.

During the year 2002-03, setting up of Fish Seed
Hatcheries and Fish Feed Mills in the private sector will be
encouraged by providing training and financial assistance.

The sectoral outlay for this sector has been
increased by 13.6 per cent over the current year's revised level and
proposed at Rs. 125 lakhs during 2002-03.

8.5

COOPERATION

The Cooperative Movement in the State has grown over
the years but a more proactive approach is required to involve this
sector in the changing market scenario. As such, a balanced and need
based approach is being worked out.

The Meghalaya Cooperative Apex Bank now has 39
branches, both in rural and urban areas. As a major agricultural credit
institution, the Bank has achieved a fairly good Credit Deposit Ratio of
36 per cent as compared to the average level of 20 per cent for all
Banks in the State.

Activities to be undertaken under this sector during
2002-03 continue to include revitalisation of cooperatives through
effective cooperative education and training, strengthening of marketing
cooperatives and supply of quality goods to consumers. In this regard,
the Integrated Cooperative Development Project with assistance from
National Cooperative Development Corporation is already under
implementation in two districts namely, West Garo Hills and Jaintia
Hills districts and will be extended to two more district namely
East Garo Hills and West Khasi Hills Districts during 2002-03. Efforts
will be made to cover other districts in a phased manner.

As against a revised sectoral outlay of Rs. 300 lakhs
during the current year, an outlay of Rs. 340 lakhs has been proposed
for the year 2002-03.

8.6

FORESTRY & WILDLIFE

In accordance with the directives of the Supreme
Court, Working Plans for the operation of State Forests have been
approved by the Central Government, subject to the directions of the
Apex Court. The Autonomous District Councils continue to be assisted in
the preparation of Working Schemes for forests under their control.
Their working schemes have since been conditionally approved by the
Central Government. Preparation of Felling Schemes for private
plantations will also be assisted.

An Armed Forest Protection Force is being set up in
the State, and an amount of Rs. 1000 lakhs has been provided under the
Eleventh Finance Commission Award, for such purpose.

Government propose to set up a Bio-Diversity Research
Centre and a State Zoological Park in the State. Suitable plots of land
in Ri-Bhoi District have been acquired for such purpose. While State
Government has provided land at its cost, the proposed Centre and Park
will be funded by the Central Government.

With a view to provide alternative means of substance
to the upland poor, particularly forest plantation workers who had been
adversely affected by the implementation of Apex Court Orders regulating
feeling of trees, efforts have been made to implement a project for the
development of Forestry and Non-Timber Forest Produce (NTFP) with
particular emphasis on raising and utilisation of bamboo. For such
purpose the matter had been taken up with the International Fund of
Agricultural Development (IFAD) and they have fielded a large number of
exploratory missions. Based on their field funding, IFAD is now
processing project proposals for further consideration and sanction.

The proposed project funding from IFAD will be routed
through the Government of India and is expected to flow to the State as
90% grant and 10% loan.

During the next year, the departmental focus will be
on afforestation of catchment areas denuded by jhumming and on
preservation of wild life by increase of protected areas. An outlay of
Rs. 950 lakhs has been proposed for this sector for the year 2002-03.

8.7

RURAL DEVELOPMENT

Major achievements during the current year under this
sector which covers poverty alleviation, employment generation and
creation of rural infrastructure, include -

(a)

Creation of durable community assets through
utilisation of a sum of Rs. 266 lakhs under the centrally sponsored
Jawahar Gram Samridhi Yojuana (JGSY) Scheme.

10000 families provided support under the
housing component of Prime Minister's Gramodaya Yojana.

(e)

Efforts to bridge critical gaps in rural
infrastructure in selected sectors under the Employment Assurance
Scheme. An amount of Rs. 248 lakhs has been utilised under the Scheme.

(f)

Under Indira Awaas Yojana, 4377 new shelters have
been completed and 2173 shelters upgraded.

(g)

14,323 old and destitute citizens, 2883 mothers and
326 other beneficiaries are expected to be benefited under the National
Assistance Programme.

8.8

RURAL EMPLOYMENT

During 2000-01, 17,08,000 mandays of rural employment
had been generated till February, 2002 under the different Centrally
Sponsored Employment Generation Programmes. It is expected that a total
of 20,81,000 mandays of employment will be generated during 2001-02.

8.9

COMMUNITY DEVELOPMENT

The utility of a delivery system depends on the
efficacy of development administration at the grass root level. The
Community and Rural Development Blocks which constitute our grass root
level institutions have been performing satisfactorily.

7 new Community and Rural Development Blocks were
established during 2001-02 under the Eleventh Finance Commission Award,
to enable benefits of development to reach the rural masses, more
effectively. Work on construction of the new Block buildings will be
undertaken during 2002-03.

An amount of Rs. 770 lakhs has been allocated for
this sector, next year.

8.10

SPECIAL RURAL WORKS PROGRAMME [SRWP]

Allocation under this programme which has been found
to be effective has been made at Rs. 24.00 lakhs per rural Assembly
Constituency and Rs. 12.00 lakhs per semi-rural Assembly Constituency
during 2002-03.

The programme has generated sustainable community
assets and will continue as a major programme of the Rural Development
Sector, during the year 2002-03.

8.11

BORDER AREAS DEVELOPMENT PROGRAMME

Border areas in the State account for a total of 1523
villages located within 10 kilometers of the international boundary with
Bangladesh and cover an area of approximately 4230 sq. Kms. Border Area
Development Schemes are implemented through different departments, aimed
at improving the economic condition of the border inhabitants.

During the current year, over 15,000 border area
students benefited from the Border Areas Scholarship Scheme. It is
proposed to increase coverage to 20,000 students during 2002-03.

Border Area Programmes during 2002-03 will continue
to focus on rural electrification, construction of School buildings,
market stalls, ropeways, community halls, footpaths and footbridges.

An amount of Rs. 895 lakhs is proposed to be provided
for the programme during 2002-03.

8.12

MEDIUM IRRIGATION & FLOOD CONTROL

The Rongai Valley Irrigation Project sanctioned at a
cost of Rs.1,630 lakhs which is the only Medium Irrigation Project in
the State continues to be implemented and is expected to be completed
during 2003-04.

Survey and investigation works in Pynthorwah,
Kodaldhowa, Pynthornein and Mawrambah Valley Medium Irrigation Projects
are in progress.

The plan allocation under this sector is proposed to
be increased from the revised level of Rs. 450 lakhs during the current
year to Rs. 495 lakhs during 2002-03.

8.13

MINOR IRRIGATION & COMMAND AREA DEVELOPMENT

An additional area of approximately 7000 hectares is
expected to be brought under Minor Irrigation by the end of the Ninth
Five Year Plan Period bringing the total areas under irrigation to over
28000 hectares. However this represents around 13 per cent of the total
irrigation potential of the State.

Government has created a separate Directorate of
Irrigation which has become functional during the year 2001-2002. It is
expected that the Irrigation potential of the State will be more fully
tapped by the new Directorate of Irrigation.

During the next year, emphasis will be on creation of
irrigation potential from surface and ground water sources. In certain
areas, drip and sprinkler irrigation system will also be developed. The
provision for Minor Irrigation Sector has been increased form the
revised level of Rs. 1,000 lakhs during the current year to Rs. 1,100
lakhs during 2002-03. A provision of Rs. 35 lakhs has also been made for
the Command Area Development programme during 2002-03.

8.14

POWER

During the current year, the Central Government
released Rs. 600 lakhs for improvement of Power Supply in Tura, Rs. 400
lakhs for improvement of Power Supply in Shillong and Rs. 75 lakhs for
electrification of 10 tribal villages, from the Non-Lapsable Pool of
Central Resources. Work on these projects is in progress.

Environmental clearance has been given for the 2 x 42
MW Myntdu-Leishka Project estimated to cost Rs. 36,308 lakhs at 1991
prices. It is expected to be funded by the North Eastern Council for
completion during the Tenth Plan Period.

The Renovation and Modernisation of Umiam State-I
Power Station, with assistance from the Japan Bank of International
Cooperation is in an advance stage of progress. One unit has been
commissioned during February, 2002 and the remaining three units are
likely to be completed by December, 2002.

In the next year, thrust will be on strengthening
Transmission & Distribution infrastructure and Rural Electrification
within the proposed allocation of Rs. 10,000 lakhs under plan.

8.15

NON CONVENTIONAL SOURCES OF ENERGY/IREP

The Meghalaya Non-Conventional and Rural Energy
Development Agency (MNREDA) is implementing Solar Thermal and Solar
Photovoltaic schemes which include the installation and distribution of
Solar Cookers, Solar Centralised Power Packs and Solar Lanterns.

As a low cost alternative with the advantage of short
gestation of period, some Micro Hydel Projects are proposed to be taken
up during 2002-2003, for which an outlay of Rs. 250 lakhs is proposed.

8.16

INDUSTRIES

The incentives available to industrial entrepreneurs
under the State Industrial Policy, 1997, the excise concessions extended
by the Government of India and the establishment of the Export Promotion
Industrial Park at Byrnihat have created a favourable atmosphere for the
development of Industries in the State. The Single-Window Agency has
cleared a total of 131 applications with an estimated investment of Rs.
45,000 lakhs and an employment potential of about 8000 persons. State
Government has, so far, approved the establishment of 26 industrial
units at the EPIP, Byrnihat.

Industrial Promotional activities include
strengthening of the Growth Centre at Mendipathar, the Industrial Area
at Umiam and the Industrial Estates located at Shillong. Jowai, Tura,
Nongstoin, Williamnagar and Mendipathar.

Industrial training Schemes include entrepreneur
development programme, man-power training and training of artisans and
entrepreneurs, inside and outside the State. Students will be sponsored
by MIDC for specialised courses in engineering, computer science,
chartered accountancy, management and other professional courses.

To encourage trade and commerce with neighbouring
countries through industrial activities a Special Economic Zone is being
formulated. It is also proposed to set up a separate industrial are -
Food Park- for the food processing sector.

The Khadi & Village Industries Board continues to
implement Rural Employment Generation Programmes, Block Development
Schemes and Consortium lending. During the current year, 50
beneficiaries were sponsored under the KVIB Margin Money Scheme.

The proposed plan outlay for Village & Small
Industries Rs. 250 lakhs and for Industries other than Village &
Small Scale Industries is Rs. 1,900 lakhs, next year.

8.17

SERICULTURE & WEAVING

The focus of this sector is for increased production
of silk-cocoons and handloom fabrics through mobilisation of existing
resources and infrastructure.

Besides implementation of the NEC funded project for
the Integrated Development of Muga, the Department continues to
implement the Catalytic Development Programme of the Central Silk Board
and the UNDP- assisted sub-programme for development of Eri and Muga.
Schemes under the Deen Dayal Hathkargha Protshahan Yojana will also be
implemented during 2002-03.

The Production of handloom fabric is expected to
increased to 67,60,000 square metres during the current year form the
level of 33,58,000 square metres during 1996-97.

Additional plantation coverage of 699 Hectares under
Mulberry, Eri and Muga is proposed to be taken up during 2002-03 within
the proposed outlay of Rs. 250 lakhs.

8.18

MINING & GEOLOGY

The Department will continue its efforts to tap the
States mineral resources, besides intensifying mineral investigation.

During the next year stress will be on strengthening
infrastructure facilities, effective decentralisation and resource
mobilisation, and development of mining industries.

To mobilise additional revenue and check evasion
thereof, the Department proposes to install electronic weigh-bridges at
key places in the State.

An amount of Rs.4,993.74 lakhs was collected as
revenue form mineral resources during 2000-01 and the expected
collection during 2001-02 is Rs. 5,024 lakhs.

8.19

ROADS & BRIDGES

Since road transport is the principal means of
communication, development and strengthening of road infrastructure
occupies a central place in the overall development strategy of the
State. This sector was allocated Rs. 10,000 lakhs or 17.8 per cent of
the plan outlay during the current year and will get a similar
allocation during 2002-03.

The total road length of the State at the end of
2000-01 was 7328 Kilometers, resulting in a road density of 32.67 kms
per 100 Square Kilometer which is belong the national norm of 40 Kms per
100 Square Kilometer. Ongoing efforts are likely to result in 7488
Kilometres of road-length by the end of 2001-02.

Rural road connectivity is an important aspects of
rural development. 2571 villages have been connected by roads so
far. 70 villages are expected to be connected with roads during
the current year. It is also proposed to continue to avail loan funds
for this sector form the Rural Infrastructure Development Fund (RIDF) of
NABARD.

8.20

ROAD TRANSPORT & OTHER TRANSPORT SERVICES

Government continues to pursue a liberal policy in
issuing road permits for operation of transport services. The
enforcement machinery is being streamlined to curb evasion of motor
vehicle tax and plying of illegal and unauthorised vehicles. A phased
programme for computerisation of all the offices of DTOs has been
undertaken. This will not only streamline public service facilities but
will facilitate issue and maintenance of computerised Driving Licence
and Registration Certificate records. Smart card based driving and
registration documents are proposed to be introduced during the year.

The construction of Baljek Airport at a cost of
Rs. 1,221 lakhs is nearly completion. Steps are being taken to
operationalise the airport at the earliest.

Helicopter Services between Shillong, Guwahati and
Tura will continue during 2002-03. Expansion of such services to other
district headquarters is under consideration.

The Meghalaya Transport Corporation operates 32
routes covering 4422 kilometres. It is continuing with huge financial
losses. Ways and means to revitalise the Corporation are under
consideration.

8.21

SCIENCE & TECHNOLOGY

Introduction of Appropriate Technologies and Science
Popularisation which constitute the main thrust of Science and
Technology programmes, emphasise generation of awareness and training of
appropriate technologies. The Technology Institution Programme launched
recently will continue. Programme for popularisation of Science &
Technology involving Science Exhibition Workshop and Environmental Fairs
will also continue.

During the next year, the thrust will be on promotion
of Centres for Development of Science and Technology, for which an
outlay of Rs. 100 lakhs is proposed.

8.22

TOURISM

Meghalaya which is endowed with rich natural beauty
is also blessed with a salubrious climate, resulting in enormous
potential for Eco-Tourism.

The State's Tourism Policy was announced last year.
Efforts will continue to promote tourism through activities such as
water sports, wildlife, adventure tourism, eco-tourism and
popularisation of historical places and monuments. These initiatives are
expected to result in the State emerging as preferred tourists
destination of the region.

An outlay of Rs. 330 lakhs is proposed for this
sector for 2002-03.

8.23

CIVIL SUPPLIES

The Public Distribution System is serviced through a
network of Fair Price Shop in urban as well as rural areas. It is
proposed to strengthen Mobile Fair Price Shops to ensure better coverage
in rural areas. The operation of the Fair Price Shops will be closely
supervised and monitored to ensure they serve public interest.

The Central Sector Scheme of Antyodaya Anna Yojana
will be implemented to cover 28,100 poorest families. The Scheme
envisages provision of 25 Kg rice per family, per month, at a rate of Rs.
3/- per kg. Identification of beneficiaries as well as issue of ration
cards under this scheme has been completed.

'Annapurna', another Central Sector scheme under
which persons above 65 years and not covered by old age pension scheme
are provided with 10 kg of rice, free of cost per month, will also be
implanted.

8.24

AUTONOMOUS DISTRICT COUNCILS

State Government will continue to work closely with
the Autonomous District Councils. The programme for providing
grants-in-aid to the Councils for construction of village, roads,
footpaths, bridges, playgrounds, Councils own office buildings and
improvement of rural markets will continue. An amount of Rs. 500 lakhs
is proposed for this sector during 2002-03.

8.25

EDUCATION [GENERAL & TECHNICAL EDUCATION]

Education continues to receive high priority. About
9.7 per cent of the Plan outlay is earmarked for this sector. The State
will continue its efforts to improve educational standards including
facilities and service conditions of teachers.

To achieve the goal of universalisation of elementary
education, it has been decided to form a Society for the smooth
implementation of the Sarva Shiksha Abhiyan. Under this programme all
children in the age group of 6-14 years should complete 5 years of
schooling by 2007.

Construction of Primary School buildings will be
undertaken during 2002-2003 under the Eleventh Finance Commission Award,
as well as under the Prime Minister's Gramodaya Yojana.

Large percentage of Primary School Teachers and Upper
Primary Teachers in the State have not been trained. As such, the
District Institutes of Education and Training (DIET) at Thadlaskein,
Sohra and Resubelpara have been made operational, to improvement the
quality of Elementary Education. Three more DIETs at Nongpoh, Nongstoin
and Baghmara are proposed to be made functional during 2002-03. The
infrastructure facilities in these DIETs will be strengthened in a
phased manner.

There are about 900 single teacher primary schools, in the
State. Efforts will be made to ensure that none of these schools remain
as single teacher school and additional posts will be created for single
teacher schools in a phased manner.

Actions has already been initiated for introduction
of two new courses, namely, 3-year Diploma in Computer Science
Engineering and 2 years post-Diploma in Information Technology in the
Shillong Polytechnic. The setting up of new Polytechnics at Jowai and
Tura under the World Bank Assisted Technician Education Project-III will
be expedited.

Access to secondary education will be widened to
cover uncovered areas. Efforts will also be made to improve quality of
education. In this connection steps have been initiated for
restructuring the Secondary School Curriculum. Information Technology
education is being encouraged and a programme will be undertaken for
phased computerization of schools.

An amount of Rs. 5,470 lakhs has been proposed for
this sector during 2002-03.

8.26

ARTS AND CULTURE

Efforts will continue to preserve and protect the
rich cultural heritage of the State. Research and documentation of
indigenous forms of art will be undertaken. Art consciousness and
promotion of creative arts will be encouraged. Preservation of
traditional forms of art will continue under the 'Living Heritage'
Scheme.

The Schemes for providing financial assistance to
voluntary cultural organisations and festivals will continue. The
Intensive Art and Cultural Development Programme will be strengthened.

A new scheme for development of traditional and folk
music will be undertaken. It is also proposed to strengthen and develop
the State Achieves during the year.

The construction of Phase-I of the State Cultural
Complex is near completion and will be commissioned during 2002-03.

An amount of Rs. 500 lakhs is proposed for the sector
next year.

9.29

SPORTS & YOUTH AFFAIRS

Endeavour to promote Sports & Games will
continue. Development of sports infrastructure at Village, Block and
State level will be encouraged. Various Youth and State Level will be
encouraged. Various Youths Welfare programmes like organising youth and
youth training camps, trekking and mountaineering and youth festivals
will continue during the next year.

Schemes for development and upgradation of Sports
infrastructure will also be undertaken. Assistance will be given for
improvement of play fields and training of coaches.

Implementation of Intensive Sports and Youth
Development Programme will be accelerated.

An amount of Rs. 750 lakhs has been proposed in the
Budget Estimates for this sector during 2002-03.

8.28

HEALTH & FAMILY WELFARE

The Health sector will continue to receive priority.
During the current year, emphasis has been given on upgradation,
extension and consolidation of the urban and rural health
infrastructure. These efforts will continue during the next year.

Upgradation of the Orthopaedic and Rehabilitation
Centre at the Shillong Civil Hospital is being implemented under NEC
funding.

The Government will stress on completion of spill
over scheme for completion of Community Health Centres, Primary
Health Centres and Health Sub-Centres during 2002-03.

The Centrally Sponsored National Programmes for
eradication of Malaria, TB, Leprosy and Control of Blindness will
continue. Thrust will also be given on implementation of National Aids
Control Programmes to achieve the targeted results.

The Shillong Civil Hospital will be upgraded to a 600
bedded hospital. The Tura and Jowai Civil Hospitals will also be
upgraded to the level of 200-bedded hospitals. Construction of
100-bedded hospital at Nongpoh, Sohra, Baghmara and Nongstoin are being
taken up.

A State Resources Centre and District Rehabilitation
Centre for assisting physically handicapped persons under financial
assistance of the Ministry of Welfare and Empowerment, Government of
India has been set up in Shillong Civil Hospital and will be
strengthened as a part of upgrading the Shillong Civil Hospital to a
State General Hospital.

An amount of Rs. 3,520 lakhs has been proposed in the
Budget Estimates for this sector.

8.29

WATER SUPPLY & SANITATION

Central Government has fixed 2004 A.D. as the year
within which all segments of population should be provided with safe
drinking water.

The programme for provision of safe drinking water to
all human habitations will continue to be taken up under the PMGY and
the Accelerated Rural Water Supply Programme, to achieve the aforesaid
target set for the year 2004.

During the current year, 150 uncovered habitations,
210 partially covered habitations and 35 iron-affected habitations are
expected to be provided with safe drinking water supply.

All Urban Centres in the State are provided with safe
drinking water. Water Supply augmentation schemes are under
implementation at Shillong, Williamnagar, Nongstoin and Cherrapunjee to
cater to the increased demand for water. The Greater Shillong Water
Supply Scheme is partially complete. The Central Government has released
Rs. 1,000 lakhs for this project under the non-lapsable pool of Central
Resources, during the current year. The construction of the Mass Gravity
Concrete Dam over River Umiew at Mawphlang has progressed according to
schedule and the remaining work will be completed by December 2002. Work
on augmentation of Jowai and Tura Urban Water Supply Schemes will also
be taken up during the next year.

Ri-Bhoi District has been selected for implementation
of a pilot Sector Reform Project, at an estimated cost of Rs. 975 lakhs
and Central Government have released Rs. 270 lakhs during the current
year for the project which involves participation of the community for
its implementation as well as future maintenance. The project will be
implemented during 2002-03.

The Shillong Environmental Health Improvement project
is likely to be taken up with the Assistance of Aus AID, next year.

An amount of Rs. 3,675 lakhs is allocated in the
Budget Estimates, for this sector.

8.30

URBAN DEVELOPMENT

Efforts to provide adequate infrastructure and basic
civic amenities in all the urban areas of the State will continue.

The construction of a Parking Lot near the District
Council premises at Shillong is in progress and is expected to be
completed during 2002-2003. Construction of the Parking Lot near the
Shopping Complex at Nongstoin has been taken up. Construction of a bus
Terminal at Madanriting will be undertaken next year.

The establishment of the Shillong Solid Waste
Disposal Project is likely to be completed during 2002-03.

Setting up of the new Shillong Township will be
expedited. Land acquisition for the second phase of the Township will be
initiated shortly.

Construction o the Nongpoh Super Market has been
initiated. The project is expected to be completed next year. In order
to ease the present congestion of traffic in Shillong, a multi-level
parking-cum-commercial facility called the Shillong Central Complex is
being set up a Police Bazar. Construction works of the Complex will
commence shortly

An amount of Rs. 2,130 lakhs ahs been provided in the
budget Estimates for this sector.

8.31

SPECIAL URBAN WORKS PROGRAMME (SUWP)

Like the SRWP in rural areas, the SUWP has generated
sustainable community assets and will continue as a major programme
under the Urban Development Sector.

8.32

LABOUR & EMPLOYMENT

Steps will be taken for phased computerization of all
the employment exchanges in the State. Existing ITIs will be modernized
to meet the changing requirement of skilled manpower.

The new Industrial Training Institute at Baghmara is
expected to be made operational during the current year. An allocation
of Rs. 180.00 lakhs is proposed for this sector.

8.33

SOCIAL WELFARE & NUTRITION

63 physically-handicapped persons have been provided
with prosthetic aid, and 211 physically-handicapped students supported
with scholarships during 2001-02. The Department proposes to assist
physically-handicapped students with Uniforms and Book Grants,
Conveyance and Unemployment allowance, next year.

Anganwadi workers and helpers, representative from
NGOs and Community leaders will continue to be trained under the World
Bank sponsored project "UDISHA".

The Supplementary Nutrition Programme for Children
and Expectant and Nursing Mothers will continue to be implemented in all
Community and Rural Development Blocks. Under PGY scheme, 86,200
malnourished children in ICDS areas and 10,580 in Urban areas, will be
covered next year.

The programme for de-addiction and rehabilitation of
drug addicts will be intensified.

The erstwhile scheme of Indira Mahila Yojna is being
recast as Integrated Women Empowerment Programme (IWEP) and will be
implemented in selected blocks next year. The Centrally Sponsored Balika
Samridhi Yojana will also continue during 2002-03.

8.34

POLICE

74 units of Police Housing are proposed to be
constructed during 2002-03. An amount of Rs.142 lakhs has been proposed
in the Budget Estimates for the purpose which include amounts available
under the award of the Eleventh Finance Commission.

The State Fie Service and the Forensic Science
Laboratory will continue to be strengthened. Mobile Forensic Laboratory
Units will be set up in all the Districts of the State.

Central Government continue to extend financial
assistance under the scheme of Modernisation of the State Police Force
besides providing vehicles, arms, ammunitions and communication
equipments.

8.35

GENERAL ADMINISTRATION

Construction of the Second Meghalaya House on land
allotted by the Government of India at Vasant Vihar, New Delhi will be
taken up next year.

Construction of the new Meghalaya House at Kolkata
has been completed and made functional during 2001-02. Government is in
the process of acquiring 10 residential houses at Vellore from the Tamil
Nadu Housing Board for establishing a Guest House for the convenience of
Meghalayans.

Construction of Yojana Bhavan as an extension of the
Main Secretariat is expected to be completed next year. Construction of
Circuit Houses at Khliehriat and Mawkyrwat is in progress.

The Meghalaya Legislative Building which will long be
remembered for its artistic beauty was gutted down by fire on January 9,
2001. Construction of the new building will be taken up next year.

8.36.

INFORMATION TECHNOLOGY

Information Technology is a sector of the Indian
economy capable of generating large-scale employment. The State
Government will tap this promising sector for the benefit of the
educated unemployed.

Government has created a Department of Information
Technology and will ensure that this sector receives adequate
support for its growth and development. Computerisation of the State
Secretariat has been strengthened and a local area network has been
established in three Secretariat Building.

Government is making serious efforts to establish and
Software Technology Park at Shillong to give a boost to software
development in the State as well as to develop IT enabled services. The
matter has already been taken up with STPI and the Union Ministry of IT
has sanctioned Rs. 50 lakhs towards High-speed Data Communication
facilities, STPI is in the process of preparation of a feasibility
report for ST Park at Shillong.

8.37

INFORMATION AND PUBLICITY

The Information and Publicity sector will continue to
create better public awareness in the various developmental programmes
of the Government through proper dissemination of information.

With a view to improve the information network and to
create better awareness amongst the public, the Department has procured
and operationalsied seven mobile audio-visual units, one for each
district, during the current year.

8.38

PUBLIC SECTOR UNDERTAKING REFORMS

Proposals for reforms of Some State Public Sector
Undertakings have been formulated and are under finalisation. These
proposals will be a part of the State's Medium Term Fiscal Reforms
Programme to be included in the proposed Fiscal Reforms MOU with the
Central Government.

IX

BUDGET ACTUALS 2000-2001

The year 2000-2001 opened with a surplus balance of
Rs. 157 lakhs. While the total receipts during the year including
receipts under Public Accounts amounted to Rs. 17,36,650 lakhs, the
corresponding expenditure was Rs. 17,32,231 lakhs, resulting in a
closing balance of Rs. 4,567 lakhs.

X.

REVISED ESTIMATES 2001-2003

The revised estimates for the current year reflects
an opening surplus balance of Rs. 4576 lakhs. While the revised
estimated receipts during the year including receipts under Public
Accounts are likely to amount to Rs. 15,94,759 lakhs, the corresponding
expenditure is expected to amount to Rs. 15,95,778 lakhs, resulting
in an anticipated closing balance of Rs. 3,557 lakhs.

XI.

BUDGET ESTIMATES 2002-203

The estimates envisage an opening balance of Rs.3,557
lakhs and a total receipt including receipts under Public Accounts of Rs.
16,35,346 lakhs against a corresponding expenditure including
expenditure under Public Accounts of Rs. 16,30,958 lakhs, resulting
in an estimated closing balance of Rs. 7,945 lakhs.

XII.

ADDITIONAL RESOURCES MOBILISATION

12.1

Keeping in view our increasing revenue expenditure as
a consequence of debt service burden and spiralling establishment cost
due to ever increasing market-price related emoluments of Government
employees, it is necessary for the State to generate additional
resources. I therefore propose to give immediate effect to the under
mentioned additional taxation measures-

(a)

Increase the rate of surcharge on all items under the
Meghalaya Sales Tax Act, Meghalaya Purchase Tax Act and Meghalaya
Finance Sales Tax Act, excluding Motor vehicles (including motor
cars, omni buses, motor vans, motor trucks, chassis of motor vehicles,
bodies of motor vehicles, bodies of motor vehicles and all varieties of
trailer by whatever name known) and tyres (including pneumatic
tyres, flab and tubes ordinarily used for motor vehicles and trailers),
from 10 per cent to 20 per cent.

(b)

Increase the Amusement & Betting Tax on 'Teer'
from 40 per cent to 50 per cent, and

These measures are expected to generate additional
resources of Rs. 1,000 lakhs for the State during 2002-03.

12.3

However, keeping in view the dependency of the people
of the State on road-transport, I propose to reduce the rate of
surcharge on tax in respect of motor vehicles (including motor cars,
omni buses, motor vans, motor trucks, chassis of motor vehicles, bodies
of motor vehicles, bodies of motor vehicles and all varieties of trailer
by whatever name known) and tyres (including Pneumatic tyres,
flab and tubes ordinarily used for motor vehicles and trailers),
from the existing rate of 10 per cent to zero per cent with immediate
effect.

XII

CONCLUSION.

In conclusion, I sincerely expect that with the
spontaneous support of all Hon'ble Members of this august House, the
Budget proposals and I have presented today, are unanimously carried and
effectively implemented, for generating conditions conducive to rapid
and harmonious growth of the State economy, to meet the ever rising
expectations of every Meghalayan.

With these few words , may I Mr. Speaker, Sir,
commend the budget proposals for the consideration of this august House.